As we have mentioned in some other articles on our blogsite, payday loans can be quite useful in certain situations. However, one needs to be careful when getting payday loans as there are some downsides which can become big problems if not taken care of as soon as possible. In this article, we will be talking about these things.

First of all, you need to remember that you will not be able to take out too much money with payday loans. Most of the lenders, or almost all of them never lend more than $1,500 at once, mostly because they do not get repaid in almost 20% of cases. In fact, if you are first-time borrower with a single lender, you might find that they will not lend you more than couple of hundreds of dollars.

It is also important to remember that they will require a proof that you have regular income. This income does not have to be spectacular as most lenders will be satisfied with a monthly income of $1,000 and they will also consider social security checks as viable source of income before they lend you the money. However, they will not be checking your credit rating, which might be good news to you.

However, the most important thing to remember about payday loans is that they involve some seriously high interest rates which are the main reason why you will want to pay back in time. In general, payday loans are not supposed to be paid off later than a month or two months at the most since you took it out, which makes things much more bearable. If you let the payday loans go unpaid, you might end owing quite a substantial amount of money after a few months, let alone a year.

You should also take care that you do not enter something that is called the payday loans cycle which involves you taking out more payday loans every month to pay for the stuff you need to pay for, always trailing back with the interests and the payments. It can be a vicious cycle and one that you easily get dragged into if you are not careful. Remember that payday loans are nothing more than emergency way out in cases of real need.

There is a certain misconception that payday loans are used by those ‘chronically’ poor and those who are not the most respect members of the community. However, this viewpoint is completely pointless first because you need to provide some proof that you have regular monthly income and also because [...] Continue Reading…

The idea behind this blogsite is that people should be in possession of all the facts when it comes to payday loans before they actually decide to borrow money. This is true for all kinds of loans and payday loans are no different. In fact, they are considered to [...] Continue Reading…